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Solar — 3% of US Electricity in 2020, 5% Next Year, & 20% in 2050?

Solar power is growing fast — how far can we take it in the coming decades?

If you’ve followed along with changes in US power capacity in recent years, you know that solar power and wind power have been dominating new power capacity installations. However, if you’ve also followed the electricity generation side (actual electricity creation), you know that this industry moves … s l o w l y. There are hundreds of power plants on US grids, and it takes many years to retire them and have the new power plants gradually represent more and more of the country’s electricity generation.

A recent US Energy Information Administration report highlighted that solar power was up to just 3% of US electricity production in 2020 (and that was a big increase over 2019). Furthermore, step by step, the agency sees solar reaching 5% of US electricity production next year. That sounds alright, but then the EIA gets into longer term forecasts and, it seems, has an overly pessimistic take on solar electricity growth in the nation. Note that CleanTechnica readers who have been reading the site for the past 5-10 years are probably familiar with this issue. We raised it several years ago, wrote an open letter to the EIA about it, and got a lot of support and feedback about it. We’ll see how it turns out, but, historically, the EIA has been fine at short-term forecasting, excellent at looking backwards, but inadequate at looking forward several years.

That said, the reference case forecast the EIA puts out, as I’ve seen it explained, is really a tool or template for others to use to change assumptions about policies, cost trends, etc. in order to build their own forecasts not based on “business as usual” assumptions. Regarding the current report, the EIA writes:

“According to our Electric Power Annual, solar power accounted for 3% of US electricity generation from all sources in 2020. In our Short-Term Energy Outlook, we forecast that solar will account for 4% of US electricity generation in 2021 and 5% in 2022. In our Annual Energy Outlook 2021 (AEO2021) Reference case, which assumes no change in current laws and regulations, we project that solar generation will make up 14% of the US total in 2035 and 20% in 2050. These data include electricity generated from both utility-scale (those of 1 megawatt or more generating capacity) and small-scale (less than 1 megawatt) solar facilities in the electric power, residential, commercial, and industrial sectors.”

So, yes, the base-case EIA forecast puts solar electricity at 14% of the market in 2035 and just 20% in 2050. Here’s more on the makeup of that forecast as well as some alternatives:

“In our long-term projections, the electric power sector continues to produce the most solar generation, increasing from 68% of total solar generation in 2020 to 78% in 2050. The growing share of utility-scale generation is due in part to the availability of a 10% Investment Tax Credit (ITC) after 2023; in contrast, the ITC for small-scale solar has expired.

“The AEO2021’s projected share of solar generation is affected by assumptions about the installed and operating costs of other generating technologies, particularly in later years of the projection period when the projected trends in solar are increasingly influenced by economic factors rather than policy. In a sensitivity case in which natural gas prices are higher than in the Reference case (the Low Oil and Gas Supply case), solar generation reaches 25% of total generation by 2050, compared with 20% in the Reference case. In another sensitivity case in which installed costs of renewables are lower than in the Reference case (the Low Renewables Costs case), solar generation makes up 27% of total generation by 2050.”

So, what do you think? 20% solar in 2050? 25%? 27%? 50%? Drop us a note and enough explanation of your assumptions, and we’ll happily write about them.

Source: U.S. Energy Information Administration, Electric Power AnnualShort-Term Energy Outlook, and Annual Energy Outlook

Featured image source: U.S. Energy Information Administration, Monthly Energy ReviewElectric Power AnnualShort-Term Energy Outlook, and Annual Energy Outlook

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